NRC OKs Entergy spinning off nuclear plants in Vt., Mass.

Tuesday

Jul 29, 2008 at 3:15 AM

By DAVE GRAM AP Writer

MONTPELIER, Vt. — The U.S. Nuclear Regulatory Commission has given the green light for Entergy Corp. to spin off Vermont Yankee and four other nuclear plants — in Massachusetts, New York and Michigan — to a newly created company, officials said Monday.

The agency rejected critics' contentions that the new firm, called Enexus Energy Corp. will be saddled with too much debt to ensure its ability to pay for any needed fixes at the plants or for their eventual decommissioning.

It found that a "support agreement" in which Entergy will put up $700 million toward operation and maintenance costs for the plants, plus a $1 billion line of credit backed by New Orleans-based Entergy, would be sufficient to allay those concerns.

The NRC said it looked at the projected finances of the five nuclear stations for the next five years and found that in all cases but one — Vermont Yankee's — the plants' revenues would exceed their expenses.

The Entergy subsidiary that owns Vermont Yankee "would not have demonstrated its financial qualifications" to participate in the transaction "without the assurance provided by the support agreement," the NRC said.

The spinoff still requires the approval of the U.S. Securities and Exchange Commission, as well as state regulators in Vermont and New York.

New York state Assemblyman Richard Brodsky, a longtime critic of Entergy and its operations at Indian Point, which is in Westchester County, said he was glad the state Public Service Commission still has a say in whether the restructuring should go forward.

He said Entergy believes the spinoff would save it more than $400 million in revenue-sharing it otherwise will owe New York state. "This is the kind of focused corporate greed Entergy is known for. That $400 million would be added onto what customers already pay for electricity."

Entergy spokesman Mark Burns said he was not able to offer immediate comment but was likely to do so later.

Entergy's corporate restructuring has been hotly debated in Vermont as well.

Democrats who control the Vermont Legislature have questioned whether the plant's decommissioning fund, now estimated to be as much as $400 million short of what will be needed to dismantle the reactor and remove its radioactive waste and other components, would end up being sufficient under the new management.

The House and Senate passed a bill, despite heavy lobbying against it by Entergy, requiring that before the state Public Service Board approve the transaction, there be guarantees that the decommissioning fund would be sufficient.